Obama to nominate 3 new Fed governors

By Hibah Yousuf, staff reporterApril 29, 2010: 10:34 AM ET

NEW YORK (CNNMoney.com) -- President Obama plans to nominate three new governors to the Federal Reserve, the White House announced Thursday.

Obama will nominate San Francisco Federal Reserve Bank President Janet Yellen to serve as vice chairman of the central bank. And the two vacancies on the seven-member board would be filled by Sarah Raskin, the Maryland Commissioner of Financial Regulation, and Peter Diamond, a professor at the Massachusetts Institute of Technology.

"The depth of experience these individuals bring in economic and monetary policy, financial regulation, and consumer protection will make them tremendous assets at the Fed," the President said in a statement. "I am grateful they have chosen to dedicate their talents to serving the American people."

The members of the Fed board of governors and select Fed presidents from around the country set monetary policy, including interest rates, as part of the Federal Open Market Committee.

Yellen, who has been considered one of the more influential presidents of the Fed's 12 district banks, will succeed Donald Kohn, who will retire on June 23. Yellen would be the second woman to hold the position.

All three will need to be confirmed by the Senate. And while Fed board nominations are typically not contentious, Fed Chairman Ben Bernanke was only confirmed by a historically small margin earlier this year.

If the three are confirmed, Obama will have named a majority of the Fed's board of governors. There were two vacancies when the president took office, and he filled one of those positions earlier.

Yellen's priority to promote economic growth over maintaining price stability is likely to be popular with members of the Senate who will vote on her nomination.

Raskin and Diamond will fill the remaining opening and replace Gov. Frederic Mishkin, who resigned at the end of August.